I was "labeled" gifted when I was in school. My eldest brother was too. It was a "good" label then.
My daughter is "labeled" gifted now. And I pushed to get her tested as soon as possible when she entered public school for 3rd grade, because she was not being challenged by the regular curriculum. She is in a one day a week pull-out program like another poster mentioned. And she LOVES it.
The thing with gifted isn't just that the kids are smart. All kids can be smart and all kids can learn. One of the differences is that gifted kids (academically gifted, that is) do not require the number of repetitions to learn something new that a "non"gifted child would. So when their math teacher is showing them long division for the umpteenth time b/c half the class still hasn't quite got it yet, the gifted student picked it up on the second time it was explained and is now bored stiff b/c they already grasp the entire concept and are ready to move on to something else.
Gifted classes have special teachers just like "special ed" classes. Because they do require different techniques and methodologies more catered to the individuals than a regular classroom provides, just like a spec. ed class in a lot of respects. They ARE special ed students...just usually at the opposite end of the spectrum. And so many times are overlooked. Many gifted kids get in trouble at school b/c they find other things to entertain themselves when they are bored with the subject matter. Either talking, or class clown, or other misbehavior.
It is wonderful to have my daughter in a gifted class that has a teacher working diligently to bring out her potential, rather than not giving her much time b/c she doesn't HAVE to--- the kid that needs help with his math or reading needs her more. She has been able (thru gifted classes) to go on several extra field trips that were for the gifted students only. Next fall they will go overnight for 2 nights to Kennedy Space Center for example. It is a small group and obviously not something the school could offer to the entire student population, nor could Kennedy offer that wide of an audience the opportunity to come.
There is something your friend may not have considered (unless she is homeschooling) and that is that having a child who is gifted who is NOT receiving "services" is at a disadvantage. They will be held back from achieving what they can in some cases, and many many things will be so easy for them that they will never be forced to learn skills that other students must to succeed daily at school-- like studying. Then one day, they'll need that skill, and guess what? They'll fail because they don't know how. And they will blame themselves and wonder why they couldn't do the work. And they'll quit, because, gosh, they are so smart but they couldn't do that? They must not be able.
Being labeled gifted isn't really the problem, imho. The problem is when gifted kids are told repeatedly how "smart" they are. Like it is a state of being. When they are praised for BEING so smart when they make an A on something. They need to be praised for their hard work--just like any other student who worked hard at something--even if they only earned a B. Trust me when I say that they know whether they had to work at something or not. And when they are praised for something that took no effort, they learn that they don't have to make an effort at much of anything.
I praise my daughter a lot, but not for being smart. She had no part in that, and she knows it. She was born with a very well functioning brain. She didn't cause it. I praise her for specifics that I see her work hard at, or at some viewpoint she used in her art or opinion or choices she is making in her relationships, etc.
Kids that are extremely gifted sometimes have social problems due to being so advanced academically, and being a little less "people smart" socially. And other kids can label them as well (teacher's pet, the smart kid, geek, etc).
My gifted kid's day doesn't look that much different than any other kid's day, usually. Except that my gifted kid is always on the lookout for a new experience and can self-entertain WAY more easily than other kids. She'll read, play the piano, draw, paint, exercise (really!) or whatever. She gets tired of the TV quickly. And she absolutely LOVES word games or puzzles and things like Jeopardy! (my child is not quite 10 yrs old).
Is that different than other kids? Maybe. Maybe not. But it is important to remember that all gifted kids are not the same. They are still individuals. Some are gifted in non-academic areas (painting/sculpting/drawing/music/dance/building things, etc.) and some are gifted in academics in particular, and some are gifted in several areas. And some have problems with things like dyslexia and ADHD, too. And their interests, like other kids, often follow their natural talents. They aren't super smart robots. And their personalities vary just like anyone else's.
I have never really understood the idea of keeping your child OUT of gifted classes if they meet the standards. But I also don't understand trying to have your child placed in gifted classes if they don't meet them. That just seems like setting your child up to feel like they are less than they should be. As the expectations for them are going to be a lot different than expectations in a standard classroom.
I have noticed that there seems to be a much stronger self-motivation in gifted kids. My daughter, for example (and I know many others like her), pushed ME to teach her to read. When she was 3. And she did learn and read everything put in front of her (by age 4)-- or she'd go find her own (her older brother's science text books!). She also contrived to have her older brother (3 yrs older) teach her to write in cursive (she wasn't quite 5) (they learned it in kindergarten in the private school they were enrolled in). She LOVES foreign language as well. She wants to learn EVERYTHING. Most kids (generally speaking) are pretty content with playing in their spare time. My child begged me to buy summer bridge workbooks for her. That she would do on her own (self taught herself how to carry digits in math) at night, in the car, wherever/whenever.